Gennum signs agreement to acquire Tundra Semiconductor
MARCH 20, 2009 -- Gennum says the acquisition of Tundra Semiconductor, valued at about Cdn$86 million, will bolster its technologies with new digital switch and bridge products.
MARCH 20, 2009 -- Gennum Corp. (search Lightwave for Gennum) and Tundra Semiconductor Corp. have entered into a definitive agreement providing for the acquisition by Gennum of all of the issued and outstanding shares of Tundra, a supplier of system interconnect products and intellectual property (IP) to communications, computing, and storage companies. Gennum says the transaction, which is valued at approximately Cdn$86 million, adds new digital switch and bridge products and functionality to the company and builds on its strategy of extending its high-speed signal integrity services and products to a broader set of markets.
The transaction is expected to result in:
- Added scale and increased market presence in an expanded, US$1.9 billion total addressable market.
- A strongly positioned business in signal integrity, bridges and switches using RapidIO, VME, SDI, and HDMI standards, as well as in PCI Express (PCIe).
- Increased global customer base and stronger existing customer penetration with broadened product portfolio.
- Expanded sales and distribution network in key growth regions such as Asia and China.
- Increased research and development capacity to develop more differentiated new products faster.
- Expected cash synergies of approximately US$10 million.
- Based on synergies, expected to be accretive this fiscal year, excluding one-time costs.
- Strong cash position on completion of the transaction.
The purchase price payable by Gennum for each Tundra common share will be, at the election of the holder, Cdn$4.43 in cash or 1.1575 common shares of Gennum or a combination thereof, subject to pro ration. Based on 19,326,053 Tundra current outstanding common shares, in aggregate, a total of $55 million cash and 8.0 million common shares of Gennum will be issued to holders of Tundra common shares. Based on Gennum's five-day volume weighted average share price on the Toronto Stock Exchange ending on March 18, the total consideration values Tundra at Cdn$4.43 per share, a 48% premium to Tundra's volume weighted average share price on the Toronto Stock Exchange over the same period.
Over the past 18 months, Gennum has focused on strengthening and broadening its high-speed signal integrity portfolio by adding higher levels of digital functionality and integrating features that allow more complex, high-speed signal transport capabilities, most recently in the video broadcast market.
Gennum expects that the combined portfolio and capabilities will deliver differentiated high-speed mixed-signal and interconnect products for applications such as wireless, wireline infrastructure, industrial, medical, server, and storage equipment.
"Through the acquisition of Tundra, Gennum is positioned to achieve its strategic and financial objectives more quickly and accelerate the development of highly differentiated, high-speed interconnect and signal integrity products," says Franz Fink, PhD, president and CEO of Gennum. "We believe that Tundra's strong position with leading communications systems OEMs, particularly in the telecommunications market, as well as its global sales network and foundation of talented employees, will increase Gennum's ability to provide more high-value products to a broader set of markets and will result in increased opportunities for the combined company to grow its business."
"We believe that the acquisition of Tundra will create a much stronger combined company, capable of expanding the served markets and applications for our products," says Daniel Hoste, president and CEO of Tundra. "Combined, we believe we will create a formidable competitor that is well positioned in high-speed interconnect markets that require signal integrity."
The definitive agreement provides that Tundra will call and hold a special meeting of its shareholders no later than May 8, 2009 for the purposes of considering the transaction. If all necessary approvals are obtained and the conditions contained in the definitive agreement are satisfied, Tundra and Gennum expect that the transaction will close on or about June 1, 2009.
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